Can anybody help-bankruptcy, mortgage puzzle

debtfreebyxmas

My husband had a joint mortgage with his brother- way before we married. His brother found a girlfriend, she became pregnant, asked my husband to move out with the promise of buying him out of the property. Money never surfaced 3 years later. Found out mortgage in arrears, 2 months.

Husband confronted him, which resulted in his brother threatening to move out and not pay mortgage. All agreed to put it up for sale- his brother then secretly had taken it off sale, he was sick of people walking round his house apparently. Found out- husband confronted him again.

This has resulted in him leaving the property, renting somewhere (wont give us address). Now mortgage company demanding payment. Husband will most likely have to go bankrupt over next couple of weeks- been in touch with CAB who have been great. Heres the tricky bit maybe you could help with...

Husband spoke to his brother, who seemed to know my husband would have to go bankrupt. He knew that the mortgage company will probably offer him to take over mortgage and seemed really happy about it :eek:
It would appear this is all a big ploy to get rid of any rights my husband has to property, at our expense of becoming bankrupt. House is more than 3 months in arrears, no one living there and currently there is no evidence of insurance.

What would you do? The house wont sell. Should we change the locks and hand keys in to the mortgage company? Seems like a big con and my husbands really been suffering through it. How can we ensure we are not entirely scammed. Will they let his brother take over the mortgage if he has poor credit? hope you can help, would be much appreciated.

kepar

Is there any equity in the property?

debtfreebyxmas

no equity, 100k mortgage, closest offer 85k, bought massively overpriced. I know my husband will have to go bk, but will his brother really get away with it?

tigerfeet2006

If the house is repo'd by the mortgage co. and your DH is BR then the full debt for shortfall, arrears and costs will fall to his brother to pay in full.

The only way his brother could get to keep the house is if his brother could arrange a mortgage.

debtfreebyxmas

aaah, so the mortgage company wont just say- "as long as you can cover the mortgage you can keep the house?". What if the house isnt rep'od- my husband goes bankrupt then his brother steps in?

debtfreebyxmas

As the house iss empty with no insurance, in arrears and no one paying, would you just hand the keys in? His brother hasnt forwarded his address to mortgage company- they only have our address

kepar

I think you are getting a bit confused,
The mortgage is a secured debt and therefore cannot be included in a bankruptcy.
If your husband sells the house, or hands the keys back and the mortgage company sell the house, then if there is a shortfall your husband and brother will be liable for the shortfall.
If at this time your husband went br all of this debt would fall to joint account holder in this case his brother to pay.

The brother could not step in as the house would have been sold.

debtfreebyxmas

So is my DH right to go bankrupt? CAB advised that it would be best? we live in rented acc, DH has joint mortgage £100k and approx £2k owed to the bank. I am confused... Would he be refused bankruptcy?

NeverAgain_2

I'm not sure he would be allowed to go bankrupt.

At present, his debts amount to £2,000 plus three mortgage payments, maybe another £1,000 or so?

Does he have any income?

There's certainly no point in rushing into bankruptcy.

If you want to outwit the brother, the longer the house is empty and mortgage arrears are increasing, the better.

Your husband goes bankrupt at some time in the future, leaving brother to pick up the now hefty tab on the house.

debtfreebyxmas

Thank you for your help, what is the minimum amount you can owe before bankruptcy?

NeverAgain_2

debtfreebyxmas wrote: »

Thank you for your help, what is the minimum amount you can owe before bankruptcy?

When you are declaring yourself bankrupt, it's not so much about a minimum amount, more about being unable to meet debts as they fall due.

So £5K of debt might bankrupt someone with a tiny income, but it probably wouldn't if the person had a job paying £350 a week.